A new notice from the Internal Revenue Service gives companies that make and sell sport fishing or archery equipment more time to pay their quarterly excise taxes.
Notice 2020-55 says the relief was issued because of the COVID-19 pandemic.
The notice basically pushes some of the federal excise tax filing and payment deadlines back to Oct. 31, 2020. Taxpayers who owe federal excise tax on sales of archery or sport fishing equipment for the first quarter of the year will also see penalties and interest and additions to tax postponed as well.
What are the instructions for filing?
The IRS notice lays out specific instructions for affected taxpayers to take advantage of the relief measures:
- Any Affected Taxpayer that has not already filed a first quarter Form 720 that wants to take advantage of the postponement must file a paper Form 720, rather than an electronic Form 720, to file its return for excise taxes on sport fishing and archery equipment. An Affected Taxpayer should file only one Form 720 for the sport fishing and archery equipment numbers for the first quarter of 2020 by the postponed deadline of Oct. 31, 2020. In addition, an Affected Taxpayer must write “Notice 2020-55” on the top-center of the Form 720 on which its first quarter 2020 excise taxes on sport fishing and archery equipment are reported after Aug. 7, 2020.
- If any Affected Taxpayer that wants to take advantage of this postponement in filing is required to file a Form 720 for excise taxes other than for sport fishing and archery equipment on April 30, 2020, and has not done so, such an Affected Taxpayer should file a Form 720 reporting such excise taxes as soon as possible with the sport fishing and archery lines blank, to stop the further accrual of late filing penalties.
- Any Affected Taxpayer that wants to take advantage of the postponement must not combine first quarter (the calendar quarter containing January, February, and March 2020) with second or third quarter (the calendar quarters containing April, May, and June, and July, August, and September 2020, respectively) excise taxes onto one Form 720. Affected Taxpayers who are seeking the second quarter relief provided by Notice 2020-48 should follow the filing procedures described in that notice. Affected Taxpayers must file separate Forms 720 for the first, second, and third quarters by Oct. 31, 2020. Moreover, first, second, and third quarter Form 720 excise tax payments must be made separately, and Affected Taxpayers should clearly designate payments with respect to the type of tax and tax period for which the payment is made.
The IRS had previously put off some tax filing and payment deadlines associated with excise taxes for the second quarter of 2020.
Federal sporting goods excise taxes apply to fishing rods and poles, electric outboard motors, tackle boxes, quivers, bows, points and broadheads, and shafts. A portion of the money collected from these excise taxes is often used to finance conservation efforts in state and federal wildlife management areas.
The excise tax is reported on Form 720. First-quarter excise taxes are normally expected to be filed and paid by April 30 of the year. With the relief measures, however, the quarterly deadline has been delayed to Oct. 31, 2020
For more information on Notice 2020-55, call the IRS COVID-19 Disaster Relief Hotline at 202.317.5436.
The Tax Place